Local shares opened a tad higher following a three-day rally last week but pared earlier gains as institutional investors sought to cash in on their gains.

"The local market continues to enjoy favorable conditions created by the latest meeting of the U.S. Federal Open Market Committee and the ECB's easing steps," Korea Investment & Securities researcher Kim Dae-jun said.

"But as the index neared the 2,000-point level, up nearly 10 percent in just over a month from around 1,800 points in early February, institutions were encouraged to cash in on their early gains," he added.

Institutional investors offloaded a net 318.9 billion won ($274 million), while foreigners and individual investors scooped up a net 244.2 billion won worth of local shares.

Large market caps ended mixed.

Market bellwether Samsung Electronics shed 0.47 percent to 1,267,000 won, while cosmetics giant AmorePacific plunged 1.40 percent to 388,500 won.

Top automaker Hyundai Motor spiked 2.66 percent to 60,100 won as reports suggested the Chinese government may resume providing financial support to Chinese consumers who purchase Korea-made electric vehicles, analysts noted.

Kia Motors, a Hyundai affiliate and the No. 2 automaker here, also added 2.73 percent to 48,900 won.

The local currency closed at 1,163.50 won against the greenback, down 1.00 won from Friday's close.

Bond prices, which move inversely to yields, closed higher. The yields on three-year Treasury notes fell 0.3 basis point to 1.496 percent and the return on the benchmark five-year government bond slipped 0.8 basis point to 1.596 percent. (Yonhap)